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Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 101 percent...
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 101 percent of face value. The issue makes semiannual payments and has a coupon rate of 9 percent annually.
(a)What is Advance's pretax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
(b)If the tax rate is 35 percent, what is the aftertax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
